• May 31, 2016
  • Denis-PombriantEarlier today Marketo agreed to be acquired by Vista Equity Partners for the cool sum of $1.79 billion which works out to $35.25 per outstanding share. Vista has its eyes open and Marketo is a public company with fiduciary responsibility to maximize shareholder value (a logical construct that I have always questioned). So let them go and do what they do, but to play devil’s advocate, I think someone made a mistake.

    First, there’s the obvious question: How does Vista make money on this long term? At some point they’ll want to sell Marketo at a higher price but that suggests there will be such a “greater fool.” But is there?

    In the last several years all the major CRM vendors have bought up the independent marketing tools and folded them into their suites. Salesforce had been rumored to be the most likely candidate to buy Marketo just before it surprised the world and bought Exact Target instead. Today Salesforce doesn’t need a marketing product, thanks, just the same. Ditto for Oracle, which bought Eloqua to kick off the buying frenzy. Other vendors, SAP, Microsoft, etc. are fine too. Sugar could use a high quality marketing automation solution to round out its offering but at nearly $2 big ones it’s hard to see that combination happening. So the question of who is a likely buyer becomes very important.

    Suppose the likely buyer doesn’t exist yet; suppose that the best fit for Marketo is a new CRM suite that will be cobbled together from spare parts by Vista. That could happen but if so the prospect of a synthetic new vendor would mean spending billions more to assemble the suite and millions more to make it all work. That’s like starting the Indy 500 by spotting the competition 450 laps. It doesn’t make a lot of sense to me, but I’m just an analyst.

    I can’t really think of a third option unless it’s using Marketo as the seed crystal of a new category of front office products whose business model revolves around marketing and lead development. That would give you a broadcast-advertising model that leverages audience development with targeted message development. This isn’t such a bad idea but it isn’t exactly new either and the existing front office players each have salient in this area too. Thus we’re back at the Indy 500.

    I’ve always thought highly of Marketo. They spent a lot of time and effort, not to mention capital, building a new idea about analytics based marketing. The idea was new and foreign in most circles when they got started but it has become mainstream. In all of this you’d have thought some other CRM company would have bought Marketo before this because it would have been a good fit for several possible suitors.

    But that didn’t happen and Marketo found itself in a game of musical chairs without a clear future. Stand-alone marketing appears to be a declining phenomenon. So now Vista no doubt has a plan and it will be interesting to watch it play out.


    Almost forgot. The re-IPO strategy is a more likely scenario but then you would have an improved balance sheet, a tidy company, and a higher valuation to sell the stock. But even if this strategy works to perfection you will still have a stand-alone marketing automation company.

    Published: 8 years ago


    Hillary Clinton speaking with Phil Fernandez, CEO, Marketo

    The overall impression I got was that modern, statistical and analytic marketing is still in its early phase though few people I know need to be convinced about its usefulness and efficacy.  You could see evidence for this belief in the products and product introductions, the breakouts, and in the speeches.

    First the speeches.  In addition to CEO Phil Fernandez’s keynotes there were appearances by Democratic presidential front-runner, Hillary Clinton and GE’s powerhouse CMO, Beth Comstock.  Each woman’s appeal to the largely female audience was obvious.  They are role models for many and an inspiration for any woman wanting to climb the greased rope of corporate success.  Each spoke about the challenges of being a woman in business today but I thought Comstock came closest to the mark when in the context of marketing she said that sometimes you simply need to give yourself agency to try something.  That’s an avenue not as easily exploited in politics where as Clinton pointed out consensus building is important and sadly absent today.

    The theme of the event was innovation and while Clinton, who spoke on Day 1, is no technology expert and not a marketing professional, her vast practical experience in modernizing the State Department by embracing the Internet and social media and her knowledge of how to sell an idea, which was honed in decades in the political arena, provided a great foundation for discussing innovation in a broader, national context.  Clinton’s message concentrating on the truth that we are all people and that we need to coexist was not lost on the men in the audience either.

    Comstock spoke on the second day and gave a more focused discourse on what it means to be a modern marketer in one of the largest, most innovative, and geekiest corporations on the planet.  Her message was that marketing has to take the lead in inventing itself, to find markets and opportunities for innovation in order to take its rightful seat at the boardroom table.  She told of instances in GE’s diverse portfolio from jet engines, to locomotives, power systems, and healthcare where marketing found product opportunities and developed markets for them.  The keys to success — and there were several — included bringing business ideas where marketing can quantify results and not simply existing to produce content, a message well in line with Marketo’s ideas about marketing.

    At the keynote level, Fernandez allowed himself a brief moment on stage to take in the company’s success symbolized by the throng in the hall.  The company introduced new and improved products for calendaring, SEO optimization, and personalization, all of which are in demand as building blocks of modern marketing.  Fernandez also hammered on the continuing need for innovation in all things marketing related as companies continue to face great challenges driven by the pace of business and the ferocity of competition.

    When it got to the breakouts, and I didn’t go to all of them, the vibe seemed to be how to help marketers to do more than adopt the basics and to exploit the breadth and depth of marketing automation.  This is no surprise for any breakout session but for a still new market that is past its early doubters but still gaining altitude in the executive suite, the sessions offered practical advice for things tangential to marketing such as how to work better with sales.  There is a great thirst for this kind of knowledge and knowhow among marketers.

    Especially illuminating to me was the amount of discussion about marketing’s interface with sales and for me this was troubling, not for marketing but for sales.  Of all the disciplines in CRM today, sales appears to me to be the one that has changed least over time and that’s not good.  Sales is the practice area least affected by CRM, where people are still allowed to fly by the seat of their collective pants.

    I say this not to be provocative but to bring together several threads.  First, the urban myth that sales force automation does not work refuses to die, second, according to CSO Insights, half of all organizations surveyed still don’t have a recognizable and implemented sales process.  Third, and perhaps most troubling to me, too often the discussion between marketers has turned to questions of how can we effectively work around sales if it insists on its recalcitrant ways?  Too much of marketing automation’s effort seems to be in devising ways to capture customer data that provides the feedback that sales ought to be giving.  At least that’s what I saw.

    My concern for sales is that it will remain stuck in its rut too long and that market forces like the automation provided by ecommerce and subscription sites augmented by the information flow provided by marketing, will serve to make selling and its practitioners redundant.  As markets and categories mature a certain amount of retail-ization of the sales function is inevitable.  However, sales people who are still avoiding formalized processes and technology are making the inevitable too easy.

    The sales function was not on trial at the Marketo event but as an analyst I routinely look at what is and wonder how it will evolve and my conclusion left me wondering about the future of selling.


    Published: 10 years ago

    HillaryDay one of the Marketo Marketing Summit 2014 was highlighted by a speech by possible presidential candidate Hillary Clinton who spoke about the intersection of social media and the Internet during her tenure as Secretary of State.  Clinton is no technological light weight and gave example after example not only of how the State Department adopted modern communication methods, but she also showed where we collectively as a technological society need to go in not only communicating but in leveraging technology.  As a speaker she graciously stayed on the topic, innovation as applied to marketing.  Perhaps that’s not her sweet spot but she stuck with it and it impressed the audience.

    Marketo CEO Phil Fernandez was happy to serve up a mix of hardball and softball questions in a discussion after Clinton’s speech, which she handled with good humor, even the inevitable are you running for president question.  Here I thought Fernandez got further than most professional journalists whose questions have been successfully parried by the non-candidate and Democratic front-runner.  Answering Fernandez Clinton said she was “Thinking about it.”  Such is the stuff of reading political tealeaves.

    If you ever doubted Clinton’s appeal you should have been in the mostly female audience for whom Clinton is something of a hero and a role model.  Her comments were designed to appeal to the audience of mostly center left people and women.  For instance, when asked about immigration and jobs her response was a measured, let’s form public-private partnerships.  And although that’s a good idea, it skirts somewhat the larger issue of getting the economy moving again.  I would have liked a response like that but then again that’s the kind of thing a candidate proposes, not a private citizen.  Alternatively, perhaps that makes me somewhat left of left.  I dunno.

    Day two starts shortly and I expect to get more detail on Marketo’s many announcements.

    Published: 10 years ago

    We are nearing year-end and that means it’s time for my annual year in review.  This is not an attempt at a quantitative inventory just my assessment of things that happened that will matter in the long run.  From my spot it looks like marketing took a big step towards greater relevance in 2013, the importance of being a partner in an ecosystem increased as did the significance of software platforms, and reports of CRM’s demise were greatly exaggerated.


    It’s not just the fact that Oracle bought Eloqua that made marketing significant and the price reportedly paid, $800 million, still seems light to me.  Marketo had a successful IPO, Microsoft bought Net Breeze and Marketing Pilot, and declared its Marketing Cloud.  In 2013 marketing was definitely on the agenda.  It also helped that all of the above mentioned companies did something revolutionary for them.

    Instead of killing their new acquisitions by trying too hard to fit them into the corporate portfolio, the big buyers of 2013 let their new acquisitions figure things out for themselves.  You could argue that bringing marketing expertise into some of these companies increased their MQ (marketing IQ) significantly and that they had no choice but to let the experts run things for a bit.  The buyers didn’t have much clue in some cases and were more or less forced into it.

    The approach worked so well that by fall marketers had firm control of their agendas and were leveraging their new companies’ considerable resources to go to war.  The best example was the Eloqua Experience user meeting held in San Francisco that attracted a crowd of “modern marketers” sufficient to fill the Hilton Hotel to overflow.  Today, Oracle seems to be one of Eloqua’s biggest customers and you can sense it in their go to market approaches.  Kudos to Marc Organ, Thor Johnson et al who got the ball rolling ten or so years ago but who were not involved any more by time the big payday came.

    The Partners

    The traditional partner channel got an upgrade too.  Typically, moving to a channel strategy is a great idea for maturing companies that want to reduce overhead by getting someone else to sell for them.  Older products under price pressure and margin erosion are frequently what partners get but in 2013 that was less obvious.

    The leader in the new channel was Salesforce whose partners leverage the core platform to build an impressive array of new products in all areas of the front office and beyond, rather than just adding a little implementation value and customization to an established product.  Salesforce’s channel strategy is unlike almost any other.  Everybody wins.  Salesforce has a greatly expanded sales team selling its product and the partners have a well-defined platform and source of raw material on which to build.  Everybody wins in this scenario, which is why item three on my list is platform.

    Also in the partner bucket, Sage decided to simplify its portfolio by selling SalesLogix and ACT! so that it can concentrate on selling  It’s a good idea but this traditional ERP company still has to prove it understands the CRM market beyond cross-selling it to its accounting customers.


    Partners and platform reached a crescendo at Dreamforce when Salesforce introduced Salesforce1 calling it a “customer platform” that incorporates, Heroku, all of CRM, ExactTarget Fuel, and some other bits.  Whether you are a partner or an enterprise looking for a Swiss Army knife software tool, Salesforce1 might be what you are looking for.  The company went into hyper drive and developed an order of magnitude more APIs that brought it all together so that older apps could peacefully co-exist with newer stuff from all of its acquisitions in a single entity that it hopes will drive enterprise computing for many years.

    Salesforce is not the only player in the platform space but they’ve typically given themselves a year grace while the rest of the market catches up.  Look for Oracle, Microsoft, and SAP to be all over platform in 2014 like white on rice, like a cheap suit, like a junkyard dog, but I don’t want to over state the issue.

    CRM’s Demise

    People have been calling CRM’s demise or at least its radical restructuring since the Clinton administration and they’ve been right but it’s still here.  In a late 2013 report, Bluewolf, the consulting group, was at it again.  This time, in the company’s second annual survey of the Salesforce customer base, it found that many customers think community will be the new or next CRM.  I think this has a lot of validity but…aren’t we already there?  To a degree we are and most market observers would, I think, agree that the traditional silos are being rapidly bridged by social to enable greater and more instantaneous information sharing throughout the enterprise.

    Nonetheless, the importance of the Bluewolf study is not to state the obvious, it is to put a marker down saying watch what happens from here.  As the front office continues to socialize you will see more new apps and sectors with increasing benefits.

    Siebel at 20

    It would be wrong to end without a tip of the hat to Siebel.  Bruce Daley pointed out to me that Siebel turned 20 over the summer and to celebrate he re-launched the Siebel Observer to deliver insights on the company and the market on a frequent basis.  Siebel is important for multiple reasons.  It is the grand daddy of the industry and many of CRM’s brightest stars got their starts there and are now populating numerous other companies and I am happy to say many are friends.  Siebel is on a very short list of companies that matter in CRM’s history along with Salesforce and Oracle—Tom, Marc, Craig, Zach, Bruce and many others all came from there and were Larry’s protégés.  If you have followed them for any amount of time, last names are superfluous.

    There were many other highlights during the year and others will no doubt offer their analyses and insights but for me, it’s it and that’s that.


    Published: 10 years ago

    CommissarHow many euphemisms are there for divorce?  We’re still good friends.  It was mutual.  Time to move on.  Whatever.  It happens all the time.

    In business, relationships form and dissolve faster than last week’s nuptials in Vegas.  Companies do what’s best for them and their shareholders and that’s the way it is.  But we don’t do business in only three dimensions.  Reality has a fourth dimension that we frequently forget about, time.  We live and work in time and at some point we fall out of time and that’s known as the big siesta, Dylan Thomas’s long good night.  The fourth dimension isn’t simply a small house at the end of a long road, it is the road and how you get to that house.

    I have been musing about time recently as I noticed that Marketo is no longer mentioned on the AppExchange though they were once a poster child.  At the AppExchange you can search on Marketo and get a lot of marketing automation vendors but not that one.  It is curious and conspicuous by its absence.

    The disappearance reminds me of a coffee table book, “The Commissar Vanishes,” which is a collection of before and after photos of Soviet era officials.  When someone fell out of like with Stalin, the party would crop or airbrush the individual from the photo in an effort to remove him from history.

    Now to be fair, this is an invidious comparison.  Salesforce is not like that and removing Marketo from the AppExchange is just what you do in business when partners become competitors.  But the change of relationship is still one way if you accept what Phil Fernandez, CEO of Marketo, wrote after the Salesforce Exact Target acquisition.  Here’s an extensive quote from his email to industry influencers:

    “Importantly, for those of you that are also customers, there will be no change in our strategy and support for our best in class integration with’s CRM platform.  As recently as this year, customers have rated Marketo as the best marketing solution, continuing a five-year streak of similar affirmation from the customer base.  We see no reason that the recent news should change our leadership position among customers or in the marketplace at large. Our integration is built using’s public web-services API’s and open interfaces. – as all modern cloud companies must be – is committed to maintaining an open platform, for us, for their AppExchange partners, and most importantly for you their end customers.  Marketo is deeply committed to ongoing support and continued innovation of our products for customers. 

    As a business decision, taking Marketo out of the AppExchange makes sense but only tactically for Salesforce’s CRM business.  For its platform business, it makes no sense at all.  If Marketo was the only example then it might not be such a big deal, but try finding Yammer on the AppExchange, as another example.  You can Google Yammer and Salesforce or Marketo and Salesforce and see plenty of hits for the two together but not on the AppExchange.

    To the extent that Salesforce wants to be the go-to platform for application development and social business process enablement it doesn’t make any sense that they would bar competitors to their marketing products on their platform’s marketing site.

    Taking down Marketo or Yammer or any of the other products that compete with its own products is a warning sign that the platform side of the house is not agnostic.  You might say that there are plenty of alternatives to Salesforce’s marketing solutions and they are still represented in the AppExchange but that only makes singling out Marketo seem more out of focus, not less.  As Salesforce is still in the process of building up the utility computing market, this seems like an unnecessary and self-inflicted wound.

    Perhaps the two companies are still friends but it doesn’t look like this divorce was mutual.

    Published: 11 years ago